FedEx is spinning off its freight business

Core Viewpoint - FedEx is spinning off its freight business into a new publicly traded company called FedEx Freight, allowing the company to focus on its parcel shipping services amid slowing demand in the express delivery market [1][2][3][5]. Group 1: Company Strategy - The separation of FedEx Freight from FedEx will occur over the next 18 months [1][3]. - The new company, FedEx Freight, will specialize in handling large cargo, while FedEx will continue to manage parcel shipping, which is more familiar to consumers [3]. - CEO Raj Subramaniam stated that this process aims to unlock value for the Freight business and enhance value for stockholders [4]. Group 2: Financial Performance - FedEx has reduced its profit estimates for the 2025 fiscal year, citing a "challenging demand environment" [5]. - The company reported lower-than-expected revenue and profit from FedEx Freight due to sustained weakness in US industrial production, which has negatively impacted demand in the less-than-truckload industry [5]. - Following the announcement of the spinoff, FedEx shares increased by approximately 9% in after-hours trading [3]. Group 3: Market Trends - The express delivery sector, including FedEx and its competitor UPS, has experienced decreased demand for next-day shipping as customers opt for more cost-effective slower shipping options [6].